Cryptocurrency would essentially be useless without the ability to store, send, receive and make use of its special features. In this section we provide overviews and tutorials for crypto tools which can help you use cryptocurrencies to its fullest potential.
We look at the differences between the types of cryptocurrency wallets and some of the most well-known brands on the market today to help you choose which one is the best for you to store your cryptocurrencies safely, and troubleshooting tips such as what to do when your transactions are stuck. Exchanges are also an integral part of dealing with cryptocurrencies because they let you convert between different cryptocurrencies, and even fiat currencies. Therefore, we compare different exchanges to see which has the best features for your use, and some tips and hacks to save money on these exchanges.
EtherDrops is a Telegram based bot designed to track major crypto markets and NFTs. Many crypto enthusiasts would use data tracking sites such as CoinMarketCap and CoinGecko, and these tools are excellent as āwikipediasā for all the altcoins out there. However, for those with more advanced needs, there are much better resources available that can make your life easier.
If youāve been in crypto for several years, youāll probably have a Telegram account. Most of the crypto projects in existence have official Telegram channels to keep their communities informed and up to date on developments, so the chances are you also use the messaging platform.
This is just as well, because one thing that makes Telegram very useful is its ability to add bots that serve different purposes to the end-user. This is where EtherDrops comes in, so you can be part of the various crypto communities and track your tokens all on the Telegram app.
What is EtherDrops?
Originally created in 2018 as a tool to monitor Ethereum wallets, EtherDrops was mainly used to track the transactions of Ether āwhalesā as well as oneās own wallets on the first smart-contract blockchain.
Four years later, EtherDrops has evolved into something much bigger than wallet monitoring. It is now integrated with Ethereum, Polygon, Fantom, Avalanche and BNB Smart Chain, providing a convenient place to track all your crypto activities within one Telegram bot.
Users are equipped with simple-to-use tools to follow coin prices, as well as track and receive real-time notifications on wallet transactions, DEX and CEX swaps, NFTs, liquidity pools, Binance funding, gas prices, and more.
By shaping settings according to your own personalized needs using a unique combination of advanced tools and instruments, EtherDrops becomes a simple yet essential bot that notifies you about anything you want, or alerts you to certain conditions. Thousands of investors, traders, and holders use it to navigate their crypto journeys.
The bot already has more than 400,000 users on board and keeps growing steadily. With the product sending over 5,000,000 notifications daily, itās no surprise that each day they welcome hundreds of new users onboard.
EtherDrops Features
Major features of EtherDrops include:
Price tracking;
Wallet tracking;
Liquidity pools;
OpenSea integration;
Gas price notifications;
Integration with Telegram groups and channels; and
Token distribution alerts.
Price Tracking
Tracking the prices of various cryptocurrencies is a basic need for long-term investors or traders. Add coins by name, ticker or contract address. Apply your personalized settings to receive instant notifications about price changes and swaps.
Price Change Notifications ā Set % Price Change to generate an alert.
Swap Alerts ā Set $ Value to track Swaps on Uniswap, Sushiswap, Balancer and other supported DEXs.
Wallet Tracking
Add a wallet by its address to monitor incoming and outgoing transactions, airdrops, NFT transactions, and created contracts.
Transaction Notifications ā Choose between different event types and set $ alerts to be notified about transactions.
Wallet Balance ā Check Balances of assets and NFTs.
Liquidity Pools
Add a liquidity pool by its contract address and receive % pool changes should it increase or decrease within the specified range.
LP Changes ā Set the % change value to stay on top of your added pool.
OpenSea Integration
Track the floor price and metrics of NFTs and arts on the Ethereum network. To follow your collection, add it by the name or address and set a % price change or generate a $ price target.
Gas Price Notifications
At times ETH gas prices can be really high and leave you with an eye-watering bill in fees to pay if you make a transaction. Set gas price notifications and save yourself a fortune!
Set Gas Alerts ā Set Gwei amount to generate an alert. As soon as it hits the target or lower, youāll be immediately notified.
Check out our Advanced Tips and Tricks to Save on Ethereum Gas Fees:
Integration with Groups & Channels
If you are an admin or a community manager of a project using Telegram, or you run a trading group, your channel could benefit from integration with the EtherDrops bot.
All Bot Features in your Groups and Channels ā The same alerts and notifications you set in your individual account can be applied to groups and channels.
Token Distribution Alerts
Token distributions often create market price pressure and increase capitalization. Be the first to obtain such info and assess market conditions to make a play in your favor (if you use Margin or Futures trading).
Token Distribution ā Receive distribution alerts from seed, private and other events for tokens that youāve added to monitoring.
Tutorial: How to use EtherDrops
1. How to install EtherDrops bot
To install EtherDrops, simply follow this link to open the bot in Telegram. It will automatically link the bot to your account. Here is an official list of the available EtherDrops install links. If you experience any delays with bot updates, you can switch to any other official link.
2. How to add a wallet
In the Main Menu, select ā+Add walletā. Tick ā which networks you wish to add to monitoring for your wallet and press ā Done (for example ETH and Polygon). Then type in your wallet address and name it. Youāll now be immediately notified whenever there are any transactions happening within the wallet, including NFT activity, in/out transactions, airdrops, etc.
3. How to edit wallets
In the Main Menu, select āEdit Walletsā. Choose the wallet you wish to edit. The menu with available options will open up. You can Delete, Rename, make it your Favourite (if ON, notifications with this wallet will be illuminated for better visibility), follow only IN, OUT or ALL transactions, check Balances, add/remove Networks for this wallet, set Alert Transactions filter (youāll only be notified about transactions that are bigger than the specified threshold).
4. How to add a liquidity pool
In the Main Menu, select ā+Add poolā. Choose the network. Next, enter the address of the liquidity pool. Enter the % liquidity change to create a notification. When the liquidity of a pool changes within your specified range, you’ll be instantly notified.
5. How to edit liquidity pools
In the Main Menu, proceed to āEdit poolsā. Choose the liquidity pool to add additional settings. You can Delete, Rename, turn your Notifications ON or OFF for this specific pool, or change the % notification alert.
6. How to add a new coin
In the Main Menu, select ā+Add coinā. Next, enter the contract address, symbol, or name of the coin. Choose the coin from the list and select network (ETH, BSC, ERC-20, Polygon, or CEX). Finally, enter the % price change and $ value for swaps (in case the coin is traded on a DEX) to create a notification. Now you are following this coin. Whenever there is a swap or price change within the range you specified, youāll receive an instant notification.
7. How to edit coins
In the Main Menu, proceed to āEdit coinsā. Choose the coin. You can Delete, turn your Notifications ON or OFF for this specific coin, change Price Denomination (in USD, BNB, ETH, BTC), change the price % notification alert, create a price alert (if a coin is x USD, youāll receive a notification), or change swap alerts.
8. How to add an NFT
In the Main Menu, select ā+Add NFTā. Enter the contract address or name of the NFT. Select the right one and type in the % price change alert to receive notifications.
9. How to edit NFTs
In the Main Menu, select āEdit NFTā. Choose the NFT. You can Delete, change % alert or price, set a new price alert, or turn notifications ON/OFF.
10. How to set gas price alerts
In the Main Menu, select āSet gas alertā. Type in the desired fast gas price to create an alert.
Conclusion
EtherDrops is a simple yet comprehensive one-stop tool for all your crypto tracking needs and continues to add new networks, coins, and exchanges as the market expands so youāll never be short of what you need. It just takes one click and a few easy-to-follow steps within Telegram to get set up, and that short initial setup time proves to be well worth it.
For a comprehensive tutorial on the more advanced features of EtherDrops such as quick shortcuts, special commands, managing profiles, how to set up the bot for groups and channels, and subscription options, read to the end of this quide. If TL;DR you can also watch a video tutorial here.
Follow DropsTab / EtherDrops for more information:
There are tens of thousands of cryptocurrencies out there, with over 1,000 new tokens launched between January and July of 2022. Over time, people in the crypto community have realized that there are many bogus projects in the blockchain space whose sole aim is to entice unsuspecting people and defraud them. This makes it compulsory for everyone to research blockchain projects before making financial commitments.
What Does DYOR Mean?
DYOR (Do Your Own Research) is a well-known acronym in the crypto and blockchain space. DYOR means that people are encouraged to conduct due diligence and gather all the necessary information on projects before depositing any funds, especially for new projects. Adequate research protects new and existing crypto enthusiasts from scams and projects with no real value. By “doing your own research,” members of the crypto community can find viable blockchain projects and avoid fraudulent or deceptive ones.
Why is DYOR Important?
DYOR is important to avoid losses, especially from scams or fraudulent actors. The evolution of decentralized finance (DeFi) and blockchain tech has made it easy for creators to sell the promise of a revolutionary product and attract cash from the general public. Since anyone with enough technical knowledge can create an asset on a blockchain, people no longer require intermediaries such as banks and brokerages before investing in the opportunities available within the crypto market. However, without governmental checks and regulations on these intermediaries, it also means that there is a high risk that the average investor will fall for a scam or fund a project with nefarious intentions.
Furthermore, since there are no centralized authorities in the DeFi space, people have no place or authority to report their grievances should the project turn out to be a scam. Fraudulent development teams know this, and exploit it by making promises they cannot deliver. In addition, transactions recorded on a blockchain are immutable. This design is a significant reason DYOR is important, since funds lost to scams or harmful projects are usually irretrievable.
How to Do Your Own Research (DYOR) in Crypto Projects
Here are some tips on how to DYOR before investing in crypto projects:
Find the project team and its Unique Selling Proposition (USP);
Evaluate the project roadmap;
Check the projectās social media reputation and presence;
Research the projectās source of funds
Read the projectās whitepaper
Find Third-Party Audit Reports
Find the Project Team and its Unique Selling Proposition (USP)
People looking to invest or deposit funds must first find information about the project’s motives, purpose, and development team. The data could include the project’s past performance and detailed use cases of featured products. If a project team is anonymous, it should set off red flags in your head, as you should be wondering why they aren’t willing to put their name behind a project if it is reputable. Also, what is the project trying to achieve? Consider if it is actually something that there is likely a market for, and whether other competitors have attempted the same idea in the past and their results?
Evaluate the Project Roadmap
Reading and understanding a project’s roadmap, which provides a strategic overview of objectives, milestones, deliverables, and resources, is an effective way to DYOR. You should also evaluate if the roadmap is feasible – this relates to the above research on the team and their background. A fake or deceptive crypto project may publish a roadmap that promises all kinds of products or features in a short time. These projects sometimes do this to excite new backers into believing the project is viable in the long run and things are moving along quickly. However, the roadmap may be too good to be true. If a project makes promises like partnerships, new products, plans to raise a large sum of money, and full government approval all within a short time, buyers should be wary.
Check the Projectās Social Media Reputation and Presence
Reputable blockchain projects usually have a verifiable social media presence and reputation. Checking the project’s reputation on major social media platforms such as Facebook, Telegram, Reddit, and Twitter gives insight into people’s thoughts about the project. See how other users are interacting with the community. Also, see if there are any questions or grievances concerning the project, and whether the team is immediately on hand to address them.
Research the Projectās Source of Funds
Before making financial commitments to a project, it is important to determine whether a single individual or an established firm backs the project with capital and other resources. Prospective investors should also research previous projects backed by these sponsors to see if they were successful. Additionally, these sponsors should have a good reputation in the crypto community. This information can be located in the projectās whitepaper.
Read the Projectās Whitepaper
All crypto projects should have at least a whitepaper that documents information and technical aspects of the project. Whitepapers contain critical information about a project’s development process, potential opportunities, and utility.
Find Third-Party Audit Reports
Many auditors, such as Certik, Hacken and Quantstamp review the code of blockchain projects before launch to ensure their security. These audits involve double-checking the code and testing it for vulnerabilities, which results in the funds within the application being much safer than a non-audited smart contract. Looking up the audit report of projects before investing is a sure way to build confidence in a project. However, people should be aware that a positive report does not mean that the project is completely safe, as there are instances where malicious code was added after the report was released.
People researching crypto and blockchain projects should use multiple tools, common tools include CoinGecko, CoinMarketCap, Investopedia and social media.
CoinGecko
CoinGecko is a popular market research source for blockchain projects. The platform provides detailed information on market caps, prices, and daily trading volumes of various crypto assets. In addition to being a credible source of crypto information, CoinGecko also provides crypto-focused podcasts, industry commentary, and daily newsletters. When going into individual asset pages, you can also find the token’s website and social channels, allowing you to continue your due diligence.
CoinMarketCap
CoinMarketCap is the leading platform for cryptocurrency market information and research. The platform provides market information on nearly all the crypto assets available. CoinMarketCap also ranks crypto assets and projects in real-time, using features like market capitalization or 24-hour trading volume to sort projects in order. Like with CoinGecko, make sure to check the individual asset pages for more information on a specific cryptocurrency.
Investopedia
Investopedia is a leading online resource in the finance space. It is a repository that explains related terms and contains news and general financial information. Investopedia explains many complex blockchain concepts in layman’s terms, making it an ideal platform for newcomers in the finance and crypto space.
Social Media
It is almost essential to sample public opinion about a project before spending money. Social media platforms like Facebook, Twitter, Telegram and Reddit contain raw and undiluted information from members of the crypto community who may have in-depth details about the project.
Although the information posted on social media may be unverified, these platforms can still be an excellent way to get much-needed information about projects. Posts may be from people who have lost money, made money, or those who noticed specifics that they considered to be red flags. However with everything on social media, always confirm that the statements being made are legitimate before you take them as truth.
Conclusion
DYOR is crucial for investors in the cryptocurrency and blockchain space. The absence of easy-to-understand information and lack of regulation somewhat makes scams more likely in the crypto space than in traditional financial markets, so never overlook the importance of research and verification. Doing the proper research before getting monetarily involved in any project is a concept that has more relevance in the blockchain sector than in many other industries because it is a disruptive and highly volatile sector.
STEPN is the most popular move-to-earn blockchain game in the crypto market this year after some significant adoption by the market and big moves with other major exchanges and well-known sneaker brands.
Move-to-earn is a new way to earn money through gaming with the novelty that it rewards not only digital activity within a game or app, but also physical activity. In short, the more you move in the real world, the more you are rewarded in your digital app.
STEPN has been crushing it lately after surpassing 300K daily active users (DAUs), receiving a strategic investment from the venture capital arm of Binance, and launching a unique collection of NFT sneakers on Binance NFT marketplace in partnership with sports brand ASICS.
What is STEPN?
STEPN is a move-to-earn health and fitness app with game elements built on Solana. Users equipped with sneaker NFTs can run and walk outdoors to earn tokens and NFT rewards. The funds earned can either be used to increase earnings in the app or can be withdrawn and sold. The mobile app has a built-in wallet, swap, marketplace, and rental system that allows non-crypto users to onboard.
How does STEPN work?
Anybody can earn tokens and NFTs in STEPN by downloading an app, buying NFT sneakers, and completing various forms of exercise. Similar to how Bitcoin mining works, users in STEPN have to prove they have physically worked out, at the cost of their own time and energy. This is validated by the appās anti-cheating mechanics using GPS and machine-learning technology.
The tokens and NFTs are then minted to usersā wallets from the people, not from the game developer FindSatoshi Lab, known for its work on cryptocurrency wallet Solwallet. In this way, people can trade their tokens and NFTs 100% peer-to-peer and over time. STEPN has created an ecosystem where the value of tokens and NFTs is based on supply and demand.
STEPN tokens: GMT and GST
There are two types of tokens available to players, GMT (total supply of 6 billion) and GST (unlimited supply). GMT is a management token that allows users to increase their income. GST is an in-game token that users receive for in-game activity.
To create a balanced token ecosystem, the developers have decided not to limit the GMT governance token earning to a small group of people. Instead, they have made GMT and GST broadly accessible to ensure balance in the mining of these two tokens.
Since many GameFi projects with a similar dual-token economy have tended not to thrive, the question is raised about whether GST, with its unlimited supply, will go into a death spiral. STEPNās model addresses this by making GST earning irrelevant at a higher level. As people approach the higher levels, they are presented with the option to choose which token to earn, and they would naturally want to earn the limited supply of GMT.
This will get amplified over time as more GMT is burned and more GMT use cases are released. This should reduce the GST token supply enough to balance the token value. If too many people are mining GMT, they will earn less than what they can with GST, so they will switch to earning GST. This will reduce the competition for earning GMT, and, in turn, make GMT mining profitable again.
Getting started with STEPN
To get started with STEPN, you must first download the app to your smartphone via Google Play or Apple Store. Then, following the on-screen instructions, you will need to create an account and receive an activation code.
You will be able to use the app fully once you have purchased your NFT sneakers from the in-app STEPN shop. Choose your sneakers based on your abilities. Once you have purchased the sneakers, open the game and start walking or running. You will start earning immediately.
How to join STEPN: Step-by-step guide
1. Download the App
First, you have to install the app on your smartphone. Depending on the model of your phone, you can do this either from the App Store or from Google Play.
2. Create an Account
After launching the app, you will need to enter your email address, to which you will receive a registration confirmation code. Enter your email address and press the āSend Codeā button. A code will be sent to your email address, and you will need to enter it in the corresponding field.
3. Obtain Activation Code
You then need to obtain an app activation code. To obtain the activation code, register in the STEPN community on one of the official social networks. Choose the social network that suits you best (Twitter, Telegram, Discord, etc.) and proceed according to the on-screen prompts. An activation code can also be received from a friend via invitation or bought from another user.
Once you have received the activation code, the main app screen will open. Click on the āGet activation codeā button. After you have entered your activation code, the app will open and the tutorial will start. Several screens will explain to you how to use the app.
4. Create a Crypto Wallet
You then need to create a crypto wallet in the STEPN app. Click on the wallet image in the top-right corner of the app. This will start the process of creating a crypto wallet, which will take a couple of minutes. While creating the wallet, you will be shown a secret phrase that you need to write down and keep in a safe place. Once the crypto wallet has been created, you will be taken back to the main app screen.
5. Start the Game
In the top-right corner, the token column will show zeros. To start the game, you need to deposit Solana (SOL) tokens into the crypto wallet you just created, in the amount that will allow you to purchase an NFT in the form of a sneaker. SOL can be bought on almost any major CEX or DEX.
6. Buy NFT Sneakers
TIP: Before you buy sneakers in STEPN, open the app and run for 10 minutes in running mode without sneakers. This is so that you can find the right type of sneaker for you. NFT sneakers are purchased in the shop. After buying the sneakers, wait until 25% of the energy has accumulated (approximately 6 hours) and then start the game. You are now ready to move-to-earn!
Playing and Moving to Earn
STEPN currently has solo mode only, in which users receive GST tokens as a reward for moving in the real world. This consumes virtual energy at a rate of 1 unit per 5 minutes of movement. All of these processes are only triggered after the purchase of NFT trainers. If the energy is at zero, no tokens are earned.
GST tokens, and subsequently GMT, are paid out depending on the following factors:
The level and attributes of NFT sneakers ā more efficient sneakers cost more. Up until Level 29, users can only earn GST, and from Level 30 onwards, they can switch to earning GMT if they wish.
Sneaker comfort parameter ā the higher it is, the more tokens are earned every minute.
Running speed ā it is necessary to maintain the recommended speed range for the sneaker. If you deviate too much from it, earnings will be reduced by up to 90%.
Marathon and background modes are set to be added later. Marathon mode will be an entirely new playstyle and is aimed for release towards the end of 2022. Background mode will be added when the STEPN team feels the time is right to approach non-crypto users.
The Importance of Energy
Energy plays an important role in earning tokens in STEPN. As soon as you run out of energy, your earnings will stop. Only when energy is available will your movement be rewarded. The amount of energy determines how many tokens you can earn for walking and running.
To increase the amount of energy you have, you can buy more NFT sneakers or get hold of rarer ones. The more NFT sneakers you own in your inventory, the more energy they will automatically generate. Higher levels and rarity sneakers will give you more energy.
Strengths of STEPN
One of STEPNās biggest strengths in the current market is the successful combination and implementation of GameFi and sports. This could be seen as a clear advantage over any competition as many crypto-native builders donāt have the connections or knowledge to replicate STEPNās GPS technology and machine-learning anti-cheating mechanics.
Because the health concept of the game and its everyday practicality is relatively simple compared to other games and apps in crypto, STEPN is a prime candidate for mainstream adoption.
Weaknesses of STEPN
There are still quite large barriers to entry for the average person. The registration process is too complicated, and to start playing, new users need to first learn how to open and fund a crypto wallet and buy an NFT item. For a newbie, this is not as straightforward as it should be.
NFTs also cost between 2.5 and 10 SOL, and way upwards of $100 if you want the best sneakers. This means there is an element of āpay-to-earnā about STEPN. However, at the moment, the return on investment (ROI) is in the region of a few weeks, which is not bad at all.
Conclusion
Making money while keeping healthy is a win-win, and as a sports GameFi product, STEPN has struck a decent balance between game elements that are not too rich and complex to stop non-gamers from entering, and sports elements that are not too difficult to stop non-athletic people from trying it out.
The tokenomics also create value for both users and the platform. As long as the concept remains simple and participating remains profitable for the average user, STEPN should continue its impressive adoption rate.
For more information on STEPN, follow their official channels:
Stablecoins are under the microscope right now following the collapse of Luna and UST, the stablecoin of the Terra ecosystem.
In this article, we look at the history of stablecoins, its pros and cons, why they are needed, and what are the risks are of utilizing them.
What is a Stablecoin?
A stablecoin is a cryptocurrency that maintains a fixed value because it is backed by reserves of other assets such as fiat currencies, securities, gold or precious metals, property, or any other assets as collateral.
There are four main types of stablecoins:
Fiat-Collateralized: Fiat-backed stablecoins are backed by real-world currencies such as US Dollars or British Pounds at a 1:1 ratio.
Commodity-Backed: Backed by precious commodities like gold, platinum, or real estate.
Crypto-Backed: Backed by other cryptocurrencies which are kept as a reserve to ensure price stability in the event of price fluctuations. Smart contracts can also be coded to ensure no trust is needed in third parties.
Algorithmic: These involve adjustments in the algorithm for controlling the supply and demand of stablecoins, usually in the form of two tokens: one a stablecoin and the other a cryptocurrency that backs the stablecoin.
Cryptocurrencies are decentralized and not controlled by centralized entities such as governments or regulatory bodies. They operate on supply-and-demand principles in a free market and can be volatile in nature.
Simply put, stablecoins allow investors and traders to ācash outā of risky investments into another crypto coin that will not fluctuate wildly in value during times of market volatility.
History of Stablecoins
Stablecoins actually have a very long history, having been around since 2014 with BitUSD. BitUSD was created in July 2014 backed by the $BTS token and created by Dan Larimer and Charles Hoskinson, both pioneers in the cryptocurrency who went on to create EOS and Cardano ($ADA), respectively.
However, even the world’s first stablecoin was not without its issues. In late 2018, BitUSD lost its peg to the US Dollar, resulting in huge criticism from the cryptocurrency community. BitUSD is no longer commonly used, and many cryptocurrency exchanges no longer support this stablecoin.
The next stablecoin to be launched was NuBits in September 2014 and was functional for 3 years. Eventually, this stablecoin also fell- suffering 2 major crashes during which the peg was broken for an extended period of time. The first of these crashes was in 2016 when NuBits was depegged from the US Dollar for 3 months. This was likely because holders of NuBits suddenly sold their substantial holdings for Bitcoin, resulting in NuBits being unable to handle the large volumes of sell-offs and losing its peg. Surprisingly, after the 2016 crash, the marketcap of NuBits shot up by 1,500%. This was caused by people buying millions worth of NuBits in late December 2017 owing to concerns about the stability of Bitcoin, whilst the NuBits team was unable to print new coins to keep up with the demand, thereby driving up prices.
The second, and final major crash suffered by NuBits was in March 2018 which was caused by insufficient reserves of the coin, meaning that the NuBits team were unable to protect the coin when there was a dip in demand. Of course, large cryptocurrency holders immediately noticed the drop in NuBits prices and panic sold their positions, causing an even greater slide in price.
After the second NuBits depeg, the stablecoin had lost credibility with cryptocurrency investors. Some holders even threatened legal action against the NuBits team or went into Tether ($USDT) and/or TrueUSD instead.
Tether $USDT however has also weathered a few storms of its own, facing legal battles with the Securities and Exchange Commission (SEC), which also shook the confidence of the market. The legal action was eventually settled in 2021 with the parent company of Tether paying nearly US$60 million.
Despite this, cryptocurrency keeps evolving with each passing year as new innovations that were once met with speculation and distrust eventually become trusted by the market. Today there are many other stablecoin options out there such as USD Coin (USDC), Binance USD (BUSD), MakerDAO (DAI), Paxos Standard (PAX), and Gemini Dollar (GUSD) that provide alternatives to USDT.Ā
Pros of Stablecoins
There are several reasons and numerous benefits to using stablecoins. In general, they are simply faster, cheaper, transparent, borderless, and programmable compared to fiat currencies. Some more benefits are listed below.
Stablecoins allow a quicker and easier way for investors to enter the crypto market by bridging fiat into stablecoins, which act like fiat currencies on exchanges.
Stablecoins are more efficient than fiat because they have the digital properties of other crypto tokens and can be moved around quicker and more efficiently than fiat money.
Stablecoins can be held as capital in non-custodial wallets such as Metamask, thus removing the need for third parties to intermediate.
Stablecoins allow for quicker, immediate peer-to-peer payments abroad that are semi-anonymous with much lower fees than fiat currencies.
Stablecoins can be used for holding, trading, borrowing, and lending abroad. When fiat-related regulatory processes are involved, even better.
Stablecoins can be staked to earn a higher yield than traditional finance in DeFi applications. When adding liquidity to protocols, they also minimize the risk of impermanent loss due to their price stability.
Blockchain data and tracking allows for a more transparent view of the market, giving investors more information on liquidity flows and thus greater decision-making power.
Many sectors of the economy and the unbanked population are benefiting from the use of stablecoins in remittance, escrow, payroll, settlement, and alternative banking that is self-custodial, cutting out intermediaries.
Cons of Stablecoins
Stablecoins used to be more controversial in the earlier days of crypto but have garnered more regulatory approval in recent years, minimizing many of the negative aspects.
Stablecoins usually require trust in a third party to ensure the coins are backed by the stated assets, which also means external audits are needed to ensure assets are accounted for.
There are lower yields on stablecoins in DeFi applications than on regular cryptos, however, these yields are still significantly higher than the interest rates offered by traditional banks.
Stablecoins utilized in DeFi applications are subject to the usual risks involved with unregulated cryptocurrency projects. The TerraLuna disaster was a perfect example of an extreme worst-case scenario for an algorithmic stablecoin.
Trial and error. Due to the relative infancy of stablecoins and the experimental nature of new technologies within crypto, there is still a risk when getting involved with newer projects or protocols.
Regulatory scrutiny. As the stablecoin market keeps growing and adding billions of dollars in value to the crypto market, it will generate increased interest from authorities. This can also be seen as a positive.
Conclusion
Stablecoins and their rapid proliferation across all blockchain protocols have brought more flexibility and adoption to the cryptocurrency industry. They are now embedded in the fabric of the market and are here to stay.
The onus remains on the individual investor to do your own research (DYOR) when deciding which stablecoin to hold. Find out who created it, whether itās a trusted centralized business or a decentralized protocol managed by smart contracts. All the options are open to you when it comes to the safer management of risk in the crypto market.
One major question all new cryptocurrency investors ask is how to actually spend their cryptocurrencies. Unfortunately, cryptocurrency is just not as widely accepted as fiat currencies. Cryptocurrencies are also subject to huge price fluctuations and volatility. Therefore, to ālock inā the price of your cryptocurrencies and as a springboard to cashing out crypto to fiat, many have converted their cryptocurrencies to stablecoins instead. This allows one to keep their dollar-pegged coins in exchanges or cold/hot wallets, so when the moment to jump back into the bull run comes, they can do so within minutes without having to deal with fiat on-ramps. Alternatively, to easily convert their stablecoins to fiat currencies for spending.
Most have considered stablecoins to be a safe means of preserving their capital without experiencing volatility and having to leave the crypto ecosystem. After all, they’re… stable, right?
In most cases, they have been, but the most recent collapse of one of the largest and well-respected stablecoins, terraUSD (UST), and other less known ones, like neutrino USD (USDN) and DEI, has led people to question the stability of all stablecoins. But is this warranted? Isn’t there a bit more nuance to the mechanisms by which a coin retains its dollar or other fiat currency peg, each with their own risks and advantages?
Although a seemingly straightforward idea, stablecoins can be quite tricky to unpack and analyze, especially when talking about non-collateralized algorithmic stablecoins, which sound too good to be true, and in some cases, are. With this in mind, let’s take a look at stablecoins, what kinds are out there, how well they are doing, and what makes them tick.
Check out our latest video- Stablecoins: Are they safe? ($UST, $USDT, $USDC, $BUSD)
Stablecoins: Are they safe? ($UST, $USDT, $USDC, $BUSD)
Stablecoins ā What Are They and How Are They Different?
Stablecoins are cryptocurrencies that are pegged 1:1 to the value of a fiat currency, meaning that, for example, every 1 USDT (USD Tether, the biggest market cap stablecoin) is worth 1 US Dollar. There are numerous stablecoins in circulation, with different coins having different mechanisms for collateralizing their stablecoins.
The most commonly used feature to categorize stablecoins is by looking at how each of them backs their tokens, e.g. their collateral/reserves. By doing that, we can focus on using more narrow criteria for evaluating and comparing stablecoins based on the risks and advantages that stem from the chosen collateralization mechanism. Broadly speaking, there are three main types of stablecoins: Fiat-collaterized stablecoins, crypto-collaterized stablecoins and algorithmic stablecoins.
Fiat-collateralized Stablecoins
By far the most popular type, fiat-collateralized stablecoins occupy the top 3 spots (USDT, USDC, BUSD) among stablecoins by market cap, accounting for roughly 94% of the total ~$155 billion stablecoin supply.
Their working principle is the most straightforward to understand. Each of these coins is backed by a combination of real USD cash reserves, US Treasury Bills, and commercial papers (liquid short-term debt issued by companies).
Crypto-collateralized Stablecoins
Similar to fiat-backed stablecoins, crypto-backed stablecoins use cryptocurrencies as collateral, and smart contracts and, typically, governance tokens to monitor price stability. Due to the volatile nature of cryptocurrencies, crypto-backed stablecoins are over-collateralized (150% for DAI, for example) to account for periods in the market when prices of the collateral assets keep going down. Learn more about DAI.
Compared to fiat-backed stablecoins, they’ve witnessed a much slower rate of adoption. However, based on data, it does seem that they are slowly starting to gain momentum and dominance over the past years, as people begin to develop trust in the previously experimental mechanisms, which is to be expected.
There are also hybrid collateral tokens such as Reserve Tokens (RSV) that are backed by both digital and fiat assets.
By far the most technically complex and technologically least mature, algorithmic stablecoins rely on on-chain algorithms to handle changes in supply and demand between the stablecoins and their sister tokens that back them by burning and minting them in both directions through a process called seigniorage, to maintain a dollar peg. This, however, only works while there isn’t a strong downward pressure on the peg that keeps stressing the mechanism, which can lead to a downward death spiral during which both tokens keep losing value as users keep panic selling at the same time as the algorithm tries to stabilize the price. Although not fully collapsed, neutrinoUSD and its Waves protocol have been experiencing extreme turbulence for the better part of two months, making users lose confidence in its stability, especially as its working mechanism is very similar to that of UST.
On the less extreme side of algo-stables lie hybrid stablecoins, or fractional-algorithmic stablecoins, such as FRAX, which is partly backed by collateral, and partly algorithmically by adjusting the collateral based on the deviation of FRAX from the $1 peg.
Learn more with our Ultimate Guide to Algorithmic Stablecoins:
https://www.youtube.com/watch?v=hdmotWPNVdQ
Criteria for Comparing Stablecoins
Decentralization
The impact of regional regulations can be a risk many would not find appealing. It’s completely reasonable to expect that the industry would be capable of creating largely decentralized stablecoins that are collateralized by one or more decentralized cryptocurrencies, and governed by a DAO. Such is the nature of MakerDAO and its DAI stablecoin, which has shown its peg strength throughout this year and especially during the most recent catastrophic UST collapse. There is a small caveat, however.
The largest crypto-asset backed stablecoin with a $6.5 billion market cap, DAI, is still heavily backed by the second largest market cap stablecoin, USDC, which itself is backed by fiat reserves, calling into question whether it truly is as decentralized as it purports itself to be. The reality is not as grim as it might seem. Even though USDC and USDP (another fiat-backed stablecoin) comprise 28.1% of the total DAI collateral, ETH and WBTC (Wrapped BTC) boast an impressive 58.6% collateral, tipping the collateralization balance in favour of decentralized digital currencies instead of centralized stablecoins. In addition, the Maker platform with the MKR and DAI tokens, together with all of its smart contracts, lives on the Ethereum blockchain, making it truly trustless and decentralized, even if a good portion of the collateral is not.
On the other hand, the decentralization of all stablecoins might not be necessary, or even desirable, as properly regulated stablecoins almost by definition require a legal entity or a consortium of entities with exposure to major governmental bodies (especially in the US) to be behind the stablecoins, so that there is little doubt about who is responsible for ensuring a full fiat backing of their stablecoins. However, this would imply heavy centralization of control over the stablecoin supply and the general mechanisms for issuance, governance, and, crucially, potential censorship.
A centralized stablecoin is a double-edged sword. On one hand, it gives unprecedented power over a vast supply of stablecoins that a decentralization-focused industry heavily relies on to do daily business. On the other hand, it allows for companies like Binance, who are behind the popular BUSD stablecoin, to prioritize user safety and regulatory compliance, giving users peace of mind about the safety of their assets.
Thus, a strong argument can be made to safely onboard millions of new users through reasonably regulated stablecoins. It’s important for this industry to appreciate the need to offer a wide range of stablecoin alternatives, from centralized to decentralized, for users with different risk appetites and technical competencies in order to accelerate crypto adoption worldwide.
Compliance & Transparency
Closely tied with the level of decentralization of a stablecoin, regulatory compliance and transparency are absolutely crucial for companies who are backing their coins with cash reserves, and who desire to find strong and growing support by institutions, companies, and investors looking to enter the space, but who have been apprehensive to do so due to concerns about a potential inability to redeem their tokens for dollars.
It’s important to note that regulatory compliance is largely a concern for stablecoins operated by corporations, as they are the ones operating mostly behind closed doors, with most of the details about their inner workings, decisions, and collateralization mechanisms being hidden from the end-users and legislators. In such situations, it is more than reasonable to expect a regulatory body to force at least some oversight over how exactly these companies are operating their stablecoins and whether they do possess the collateral they claim to have.
The same can’t be said about open-source, decentralized governance-powered, blockchain-native, crypto asset-backed, and over-collateralized stablecoins that are being operated completely out in the open, with every decision, piece of code, and capital relocation in smart contract escrow accounts being registered on-chain. For coins such as DAI, compliance and transparency are baked into the protocol, and it can be reasonably argued that the necessity for any kind of regulatory oversight is moot, as the community and the free market cryptoeconomic pressures have organically grown a robust and freely auditable stablecoin that’s fully backed by digital currencies.
For fiat-backed currencies, the two large-cap extremes in the range of transparency and compliance are BUSD and USDT. While BUSD has been extensively cooperating with the New York State Department of Financial Services (NYFDS), and showing that every BUSD is backed by an equivalent amount of cash, USDT has been under significant scrutiny over the past years regarding its executives and the USDT backing. These allegations, combined with the lack of transparency by Tether, have made many worry whether USDT is a house of cards about to crumble as the Chinese real estate bubble begins to pop.
Financial Sustainability
In addition to the existential risks posed by the type of collateral chosen for stablecoin reserves, another source of risk that can be analyzed for a project is its cashflow. Changes in the cashflow of a protocol can offer clues about the health of the ecosystem and its ability to withstand market shocks.
Understanding how a stablecoin protocol spends and, most importantly, earns its money, is key to making predictions about the long term sustainability of such projects. Without proper long term revenue models, protocols are left to come up with highly appealing but unsustainable practices such as incredibly high yields on stablecoin deposits (such as UST had) or very low to non-existent trading fees to make it appealing for users to use that stablecoin as their dominant medium of exchange. These kinds of practices sooner or later come back to bite them in the ass, as there is a very high probability that the high yields and low fees are paid for not from organic revenues, but rather from alternative revenue sources (as is the case for Binance), or from project’s treasury/VC investment money, in hopes that they would be able to subsidize the attractive rates for long enough to reach a critical mass of users to then eventually either lower the yields and increase the fees, or simply keep running a ponzi-like operation for as long as possible.
Risks are High, always DYOR (Do Your Own Research)
If something in crypto sounds too good to be true, it very likely is. The most recent example of this was the Anchor Protocol’s 19.5% yield for UST deposits, which should’ve been a huge red flag, and yet many, many individuals chose to deposit their life savings into a supposedly stable UST in hopes of an unsustainably high APY.
For a $50 billion project to go down to virtually nothing in a matter of weeks is nothing short of astonishing, and should serve us all as a warning to do our due diligence thoroughly, and ask uncomfortable questions, even if the whole market seems to be fully on-board with a project.
As the saying goes, “Follow the money.” If a protocol is promising unbelievable returns, if the company behind a stablecoin year after year refuses to prove their fiat reserves, and if a algorithmic stablecoin seems to have a fishy peg stabilizing mechanism that can only work in an up-only environment, then you should exercise caution. And as with everything, whether it be cryptocurrencies or stocks etc, ask yourself if you have really fully done your research and never put in more money than you can afford to lose.
Whether a blockchain project lives or dies depends on its capability toattract and grow its user base, and projects that are unable to gather or maintain their clientele eventually fold. To kickstart or encourage engagement within the community, these projects often find themselves doing token airdrops, using them to raise awareness and value for their products while also incentivizing new and existing customers.Ā
A crypto airdrop is a method used to distribute cryptocurrencies to a project’s community of users for free, usually in exchange for participating in a campaign or owning other related assets. Airdrops are typically used as a marketing and awareness strategy to draw attention to a product or event. These projects may share tokens to existing users’ crypto wallets or encourage prospective users to register accounts to receive assets.
Types of Airdrops
Over the years, the airdrop marketing strategy has taken many different forms. Several projects have used airdrops to create awareness, promote features, and attract users. For instance, gaming metaverse ArcadeLand launched an airdrop in March where 850 participants shared a 2,000 USDT prize pool. Eligibility required simple tasks, including social media activity such as following ArcadeLandās Twitter and participating in the projectās announcement channel on Telegram.
There also was a MetaGods airdrop in November for 800 winners, including bonuses for the top 50 referrers. Participants also qualified for a $2,000 prize pool by completing tasks on Twitter and Telegram.
The Sukhavati Network also launched an airdrop of 10,000 $SKT worth 6000 USDT to celebrate achievements, including an official startup sale on Gate.io and a MEXC listing. The prize pool was for a total of 1050 winners, with 1000 $SKT reserved for the top 50 referrers. Although projects use different types of airdrops depending on their aim for each one, the most common types include:
Standard Airdrops
During a standard airdrop, wallet holders receive small amounts of the new cryptocurrency in return for completing tasks, such as signing up for a newsletter or creating an account with the crypto project. Some projects require participants to complete a KYC (Know Your Customer) verification or provide their email and wallet addresses before receiving the tokens.
Standard airdrops often serve as a good preface for projects to introduce themselves to the public. New projects, such as this recent airdrop hosted by Questian, attempts to pull in more attention by asking their community to complete tasks for USDT.
Bounty Airdrops
Projects that use bounty airdrops distribute their tokens among users who help to create awareness ā usually across social media platforms. To be eligible for these airdrops, participants must perform simple tasks such as retweeting an official tweet, sharing a Facebook post, or creating Instagram media. Participants may also earn by referring new users. Although this type is similar to standard airdrops, the main difference is that crypto projects usually reserve bounty airdrops for people who help create public awareness. Standard airdrops are simply open to anyone who joins the projectās community via accounts, newsletters, or other similar channels.
Exclusive Airdrops
Blockchain projects usually reserve exclusive airdrops for loyal followers. In many cases, these airdrops automatically go to early adopters or users who are frequently active on the platform. Eligible members of the community receive these exclusive airdrops with no strings attached.
Examples include a recent sudden airdrop hosted by MetaGods, which asks their community to simply drop their wallet address for an exclusive prize. The method was also utilized by AkiralGal, whose tweet asked their followers to screenshot their brand new AkiraGal wallpaper for more rewards.
Exclusive Airdrop hosted by MetaGodsExclusive Airdrop hosted by AkiraGal
Holder Airdrops
These are airdrops for users who already hold specific cryptocurrencies or tokens. So, to be eligible for these holder airdrops, users need to be holding a specified type and/or amount of a particular token by a specified date. For instance, a new Ethereum-based project may offer free tokens to the Ethereum blockchain community, or a new exchange may offer its tokens to holders who own the native cryptocurrency of a competing exchange.
Hard Fork Airdrops
This type of airdrop occurs when a permanent blockchain split creates the need for a new token to go with the new chain. While the previous blockchain still exists along with old tokens, users may receive tokens from the new blockchain via an airdrop. However, this does not happen with every fork, only with hard forks. A hard fork occurs when the community cannot decide how to move forward, and a new chain must be created via a split.
Growth and Popularity of Airdrops
Since the inception of cryptocurrencies, people have used digital assets to move finance to decentralized platforms. Several decentralized cryptocurrency projects have also emerged to satisfy the global need for decentralized finance, with many of them using airdrops to attract users. These projects usually airdrop a percentage of their total token supply shortly before or after an official launch. A recent example is the Looks Rare airdrop, distributing 12% of the total $LOOKS token supply to anyone in the OpenSea community that spent more than 3 ETH on the NFT exchange.
Another example of the popularity of airdrops was the recent MetaWars Alliance Gleam Campaign which features an extensive collaboration between multiple projects. Running from April 17 to April 22, the campaign had a prize pool of more than $20,000 open to 100 winners. The MetaWars Alliance Campaign had 9 partners, including Souls of Meta, MetaLand, Battle Saga, The Three Kingdoms (TTK), Bit Hotel, Age of Tanks, Mouse Hunt, MechaChain, and FitEvo. The initiative was yet another prime example of how multiple projects can use airdrops for cross-promotion that can help all involved projects gain much-needed traction. MetaWars successfully achieved this aim as the campaign saw nearly 232,000 different entries.
The Dark Side of Crypto Airdrops: Scams and Controversies
The need for blockchain projects to launch airdrops spurred the creation of several platforms that aggregate airdrops from promising projects. These platforms made airdrops a lot more popular, increasing the number of people who consider the method a channel for passive income and an opportunity to earn new crypto assets.
Beware of SCAMS!
(Beware of scams! This recent ApeCoin attack stole $1 million through hacked verified accounts)
Unfortunately, the airdrop method has suffered its fair share of scams and controversies. As with anything tagged “free,” illicit players exploit community members’ innocence and use deceptive means to obtain funds from unsuspecting people. In March, a Twitter phishing scam pretending to airdrop ApeCoin tokens successfully stole $1 million from unsuspecting users. The Ape Coin scam promised users a rare NFT airdrop which can only be received after paying an ETH gas fee. The scammers then not only made off with the ETH fee, but because users had to approve and sign the transaction with their cryptocurrency wallets, the scammers were able to take the rare and often valuable NFTs contained in those wallets. Some notable NFTs stolen in this scam included Jay Chouās Phantabears, Bored Ape Yacht Club, Mutant Ape Yacht Club and Doodles.
There was also a fake Azuki NFT airdrop where self-proclaimed Azuki affiliates hijacked verified user handles, got users to connect their Ethereum wallets, and made away with their highly valuable NFTs.
How to Protect Yourself Against Airdrop Scams
In light of these scams, members of the crypto community should adhere to certain precautions when participating in airdrops. The most important is the DYOR (Do Your Own Research) rule, which requires people to do extensive research on projects advertising airdrops before buying in.
However, scammers are keeping ahead of the game. For example in the ApeCoin airdrop scam, the scammers hacked into and hijacked the Discord servers for Doodle and BAYC, posting the faked website on the server to make it look like a legitimate announcement. The scammers also used faked Twitter accounts (including some from verified Twitter handles) to spread the fake links.
The following are other steps that help avoid airdrop scams:
Never pay for airdrops;
Check multiple sources and social media accounts belonging to the project to see if the airdrop is legitimate. For example, if a projectsā Discord server is being compromised they may make an announcement on their official Twitter or Telegram;
Never participate in an airdrop that requires user private keys or mnemonic phrases;
Protect personal identity and data as much as possible;
Avoid KYC airdrops if possible (although not always the case); and
Most airdrops require an email address. Users should create a new ‘burner’ email address to use only for airdrops.
It might be impossible to create an exhaustive list of steps required to avoid scams because fraudsters get more creative with their illicit activities, but participants should always be on the lookout for airdrops that do not tick security boxes or have little to no information obtainable from research.
Airdrops have many benefits in the blockchain space, such as marketing, building communities, and providing additional value to loyal users of crypto assets. Authentic airdrops help people earn extra income and provide additional utility with little to no effort. However, airdrops may be harmful to people who do inadequate due diligence or personal research. If an airdrop seems too good to be true, there’s a good chance it is.
The vast amount of innovations and creativity happening within the crypto space is overwhelming. Countless projects, protocols, apps, tokens, and communities are launching, layering, merging, forking and growing every day. It can be a lot to keep up with.
Fortunately, blockchains are public data sources, and the historical ledger of addresses and transactions is a treasure trove of data, just waiting to be unpacked and explored. Anyone can view the transactions that are occurring in real time and interpret what is happening on the blockchain. However, in its raw form, blockchain data is kind of like binary code: great for machines but tough for humans. What is needed is not only a data platform that can convert it to a more useful form, but also a community of analysts that can give it meaning.
Enter blockchain analytics. Blockchain analytics is the act of inspecting, identifying, understanding, and visualizing data on a blockchain. Doing so allows users to gain valuable insights that would otherwise be hidden in traditional systems. Just as Google organized the internet of information for consumers and commerce by indexing the World Wide Web, making it accessible without requiring any knowledge about the underlying TCP/IP protocol, blockchain analytics technology is building the pathway for an easy-to-navigate internet of value as well as the emerging data economy.
What Is Blockchain Analytics?
Blockchain analytics is the process of analyzing, identifying and clustering data on the blockchain. Blockchain analytics also models and visually represents data in order to identify key information about users and transactions.
More and more companies operating with cryptocurrencies are using blockchain analytics tools to analyze transactions and assess the level of risks to meet regulatory requirements worldwide. This is done to help stop illicit transactions such as money laundering and fraud from being carried out.
Crypto asset transactions carried out are inherently anonymous so blockchain analytics providers help to provide the data needed to match a transaction with a person or company. This helps to keep cryptocurrency markets and transactions safer for everyone. Blockchain analytics can achieve this by scraping blockchain data, which is all public.
How Does It Work?
Blockchain analytics providers scrape publicly-available transactional data to tie crypto wallets back to illicit or criminal behavior. Data scraping is the act of collecting and structurally storing and updating data in real-time. This data includes information on which cryptocurrency wallets the cryptocurrency were sent to and from, the type of cryptocurrency, the amount, and the time of the transaction. As for cryptocurrency wallets, they are digital wallets that can send and receive payments. And specifically for those wallets maintained by cryptocurrency exchanges, users must first go through a Know Your Customer (KYC) onboarding processes whereby the personal details of the crypto walletās owner are recorded and stored.
When a crypto wallet transaction is made, that data is forever on the blockchain. It cannot be altered or erased. Through the scraping of these blockchains, blockchain analytics ties crypto transactions to illicit activity through certain signifiers such as a crypto wallet previously linked to illicit transactions like drug smuggling or terrorist financing. Through that, a wallet or transaction is flagged and given a risk score. When a crypto business or a financial institution works with a blockchain analytics provider, any transaction they undertake can be screened to provide a risk score for the crypto wallet in question.
If further investigation is needed, a blockchain analytics provider can forward this type of information and analysis to the relevant law enforcement authorities, who can match an identity with an anonymous wallet, via a Suspicious Activity Report (SAR). Because the transactional data in the wallet represents all transactions that the specific cryptocurrency has been used in, an end-to-end trail is thus created.
The wallet is tagged with a typology by the analytics provider, which ties it to a certain illicit activity that will be flagged in future transactions. The provider will also create a heuristic which clusters transactional wallet data with similar typologies. (Ultram) When multiple wallets are owned by the same person, blockchain analytics can help to determine if transactions carried out by different wallets are actually coming from the same place.
Collecting data on the identifiers of illicit transactions is a continuous process. Blockchain analytics is a key line of defense for creating fair and legal crypto environments, helping to discover the source and destination of illicit funds.
Why Is Blockchain Analytics Important?
Often hackers and web criminals use cryptocurrency due to its pseudonymous nature. Thanks to blockchain analytics, we now have access to specialized analytics tools that can scan otherwise hard to track the trail of transactional data on public blockchains. Blockchain analytics makes it possible to follow who is buying what and paying for which product and services utilizing cryptocurrency.
Many blockchain analytics providers help to create these insights by turning blockchain raw data into searchable and executable data that individuals and businesses can easily search and build services on top of. This has tremendous value to regulators, law enforcement, companies and users within the crypto space.
Regulators and law enforcement can have full visibility on illicit transactions and track the movement, allowing them to uncover the identities of the criminals over time. Companies are able to have full visibility over transactions made by vendors or third parties and ensure legitimacy of those claims. Users such as traders are able to have visibility on what smart money is doing and make better informed decisions, leveling the playing field. Smart money in crypto represents a new type of economy where knowledge is open and powerful actors’ behavior is revealed.
All organizations who work within the crypto asset market, whether it be crypto businesses or financial institutions, also need to remain compliant. Blockchain analytics providers can help these financial institutions pursue their compliance efforts. Through blockchain analytics, compliance departments can identify fraudulent or illicit activity, protect themselves from risk and work to create increased trust and transparency within the system and thus maximizing opportunities for growth and profitability.
Blockchain Analytics Providers
Let us take a look at some of the most popular blockchain analytics providers that are developing new insights from raw blockchain data to make it accessible to users of all levels.
1- Dune
Dune, formerly known as Dune Analytics, is a powerful tool for blockchain research. It can be used to query, extract, and visualize vast amounts of data on the Ethereum blockchain. Users can simply query the database to extract almost any information that resides on the blockchain. Dune released its free version in 2019. Since that release, Dune has grown exponentially with users from all around the world joining in to leverage the on-chain analytics it provides.
Example of a graph visualization from a popular query dashboard
Duneās strengths are in its open data source. Analysts, traders, and number crunching data enthusiasts make up the community. They create and openly share their queries which can then be forked and remixed in a multitude of ways by others. That is why Dune has been described as the āGithub for on-chain analysis.ā The secret sauce is the collaborative effort that is built-in to the Dune platform. So instead of dealing with the status quo, siloed sets of dashboards, the queries on Dune Analytics are open source, creating a revolutionary way for their community to harvest and remix blockchain data.
Dashboard page on Dune Analytics
The community version of Dune allows users to conduct any kind of on-chain analysis. Dune converts the raw blockchain data into a readable format, and queries can be completed with SQL. Dune gives its users access to datasets and they can create their charts and dashboards. Users can then share what they are working on. And working with Dune provides one with good education and powerful insights into how on-chain analytics systems work in general.
With Dune, users can explore the dashboards and queries of others in the community. It is similar to sharing dashboards on Google Analytics. And by researching the work of others, users can find inspiration to come up with even more queries to find deeper insights.
It is not much of a stretch to say that Dune is fast becoming the default platform for Ethereum data seekers.
Use Case: Dune has more than 22,000 different dashboards, a method of discovery. Given that the queries within the dashboards are user-generated, the quality varies. Some may be professional-grade and easy to scan, while others result from a SQL studentās early lessons. These are searchable by name or tags.
PARSIQ is the next-generation monitoring and intelligence platform for various blockchains, successfully connecting legal systems and off-chain applications to precious blockchain-based data. PARSIQās platform provides a suite of products that handle everything from database querying to instant notifications. The use case of PARSIQ extends not only to the on-chain blockchain but also to the off-chain universe.
Transaction tracking for compliance purposes, financial accounting, or building insights on the different properties of competing blockchains are some of the jobs that PARSIQās applications perform as off-chain jobs. PARSIQ also provides a tool that monitors and processes blockchain data. Every single blockchain activity that occurs on the platform results in a massive amount of information. All of this circulates through the PARSIQ platform and activates various parts of it. Every product that belongs to the ecosystem has a particular processing subsystem of the platform standing behind it.
Smart Triggers on PARSIQ
With Smart Triggers, users can create āif-this-then-thatā workflows, allowing users to watch for a specific on-chain event and initiate downstream actions when they occur. PARSIQās Trigger Wizard is a no-code editor that allows users to create Smart Triggers for the most common use cases in just minutes. Smart Triggers can be used for a variety of use cases:
Build user notifications ā PARSIQ delivers real-time alerts to users when relevant activities occur
Expand product functionality ā users are able to build capabilities on top of blockchain data without writing custom code
In order to solve actual problems and meet the demands of business use cases, PARSIQ introduces the possibility of using various on-demand services and data delivered by third party providers integrated to the PARSIQ platform. Smart Triggers are deployed to the PARSIQ system and continue to circulate the on-chain data. External Data Providers (EDP) are the source of external off-chain or even on-chain data that can be plugged in and additionally combined with Smart Trigger data. With this feature, it is possible to combine the on-chain data with off-chain data, such as market data, risk scoring, forensics information, and more
Use Case: PARSIQās wallet surveillance tools notify wallet holders on every inflow and outflow of funds. Any alert sent by PARSIQās transports informs users who are at risk with a potentially exploited wallet in their possession.
Whitelisting is another useful tool to preserve usersā trigger count. It gives the user control of what they deem trigger worthy transactions. Making frequent transactions & interactions with certain addresses or addresses they are familiar with would be acceptable without triggers, but addresses not whitelisted will trigger alerts.
To set up wallet surveillance with PARSIQ, you can refer to this tutorial video.
3- Elementus
Elementus is the first universal blockchain search engine and institutional-grade crypto forensic solution. They are building the next generation āWhoās Whoā of crypto entities on the blockchain with the best-in-class search and analytics capabilities. Their compliance solution and data analytics platform are being used by key U.S. governmental agencies to solve some of the most high-profile cyber investigations and by financial institutions to build the future of finance and commerce on the bedrock of blockchain and digital currencies.
Elementus applies data science to restructure underlying blockchain data into a schema optimized around the relationships between blockchain activity, providing valuable context far beyond manual investigations on individual transaction level. The Elementus view provides a powerful clustering and confident entity attribution based on insights that exist tens or even thousands of transactions away.
A visualization of token sales created using Elementus
As the use of cryptocurrency increases, so does the complexity of investigations. Elementusās Intelligent Network Expansion technology allows users to generate a network in seconds based on custom parameters relevant to their investigation.
Elementus offers several products dedicated to different solutions within its ecosystem:
Radar ā for compliance solutions. Users are able to extract risk scores for any public blockchain address, consumable via API, real-time alert, or via the Radar user interface.
Echo ā for custom analytics. Users are able to harness the power of Elementus Analytics paired with the versatility of Palantir Foundry, accessing custom data analysis applications for any use case.
Pulse ā for investigations. Pulse provides almost instantaneous tracing of funds from source to destination with multi-level entity attribution, powered by proprietary RapidTraceā¢ and EntityIndexā¢ technology
Use Case: Elementus was used to track down billions of stolen bitcoin in a fraud investigation of a YouTube rapper named Razzlekhan and her husband Ilya Lichtenstein. The couple was arrested on federal charges of conspiring to launder a multibillion-dollar trove of bitcoins stolen from cryptocurrency exchange Bitfinex in 2016. The couple was not accused of the theft itself.
Analysis provided by Elementus has found that the pair were able to shield the unseized money through a complex series of crypto transfers. Max Galka, the CEO of Elementus, said the bitcoins were moved across more than 20,000 transactions, indicating that some form of automation software was used.
According to Galka, some of the unseized bitcoins were transferred through the Russia-based darknet market Hydra. āItās the largest darknet market in existence,ā Galka says. āIt is highly unlikely law enforcement has the ability to trace these funds further.ā According to Elementus, the last known movement of the unseized cache occurred on January 25th 2022, shortly before the coupleās arrests at their Wall Street apartment.
4- AllianceBlock
AllianceBlock is building a globally compliant decentralized capital market by providing a bridge between traditional finance (TradFi) and decentralized finance (DeFi), unlocking trillions of dollars in capital. The AllianceBlock Protocol is a decentralized, blockchain-agnostic layer 2 that automates the process of converting any digital or crypto asset into a bankable product, simplifying the capital transfer process between regulated and opaque markets.
The protocol has three main pillars, focusing on compliance and regulation, data, and DeFi technology. The AllianceBlock Data Tunnel is a key component of the data element, and it leverages their partner Ocean Protocolās technology, as well as partnerships with Parsiq, API3, Covalent, DIA and Chainlink. The Data Tunnel is a data marketplace that makes data accessible to all through a monetized marketplace, while ensuring traceability, transparency, and trust. Data providers and consumers will benefit from increased access to one another, driven through a secure and easy-to-use solution.
The Data Tunnel dashboard
The AllianceBlock Data Tunnel makes it possible to publish data in a decentralized and simplified manner, without needing to be proficient in DeFi, MetaMask, or private keys. This is crucial to attracting a wider, more mainstream audience. In line with this, the Data Tunnel also simplifies usability for data consumers and developers through a standardized output format. This is in contrast to current offerings, with datasets found in a wide range of formats, making it more difficult for consumers.
Ultimately, the Data Tunnel aims to become the oracle of oracles, being able to take data from oracles to the Data Tunnel, enhancing this data, and then feeding it back to the oracle providers. The Data Tunnel is chain-agnostic, in line with AllianceBlockās wider vision, to allow for the greatest access and breadth to both datasets and consumers and to ensure as wide adoption as possible. The AllianceBlock Data Tunnel aims to incentivize data providers to share more data, acting as the conduit through which both DeFi and TradFi users can access and take advantage of increased data opportunities.
Use Case: Financial institutions are largely excluded from offering investors access to DeFi. Fund distribution is one of the issues. AllianceBlock provides a solution to these issues by offering access to Open Finance that allows all market entities to participate. It is an end-to-end regulatory compliance framework that serves as a bridge between stakeholders and all actors within the capital markets chain.
In a traditional fund distribution model, all intermediaries between the investor and fund manager can operate independently. Many may only communicate with the next chain in the link. When they do communicate, it is likely through email correspondence, or, for certain operations, even fax or post. This creates inefficiencies.
Traditional fund distribution model
AllianceBlock seeks to create a fund protocol which hosts all of the required activities on one platform. This allows for greater operational transparency and efficiency.
The AllianceBlock fund distribution model
Learn more here about AllianceBlockās solution to fund distribution, and to explore more use cases for the platform.
5- HUBX
HUBX elevates private placement and loan syndication deal distribution for banks, exchanges, and brokerage firms by connecting into core systems to deliver dynamic data insights and a richer customer experience. In the world of syndicated lending, accessing accurate and timely data is critical for origination and distribution teams to make meaningful and effective decisions. The way data is captured and interpreted constitutes the single most important success criteria to protect and scale capital raising operations. HUBX brings together all relevant data from across an organization to deliver a single source of truth for all participants.
Founded in 2015, HUBX platforms facilitate collaboration between banks and their institutional clients, connect syndicate desks with the rest of the organization, and simplify execution. Each network hub is private, ensuring that the clientsā data is always protected. HUBX strives to help banks adapt quickly and seamlessly to the rapid digital transformation that is driving private capital markets today.
By connecting all participants on their own terms, HUBX will help accelerate deal execution, reduce costs, and introduce standardization and automation into the market. By offering unrivaled customer experience and dynamic insights and tools to their clients, banks are able to harness the true potential of their data and the network effect.
Use Case: HUBX has partnered with financial software solution developer Finastra to help corporate lenders during the loan syndication process by reducing manual workloads. As a first step, this deal sees HUBX Arranger integrated with Finastraās back-office loan software Fusion Loan IQ, which is used by 90% of the worldās top 100 banks to process over 70% of global syndicated loans. While the market is worth around $4.5trn annually, much like in private equity, the majority of work is manual and disconnected.
According to Axel Coustere, HUBX co-founder, āHUBX Arranger provides a key missing link for Finastraās clients. The ability to digitally scale the arduous syndication process by tackling the lack of end-to-end execution. There are many manual, time consuming steps and a lack of real -time visibility currently associated with this piece of a bankās business. Not doing this well limits the banksā ability to manage and improve risk and ultimately reputation.ā
Conclusion: The Rise of Data Analytics
Modern businesses have been benefiting from data analytics for several years now. According to Forbes, data analytics adoption in enterprises increased from 17% in 2015 to 59% in 2018. Now, only 10% of businesses have refused to utilize big data. One category of data analytics that is poised to change and transform the industry is predictive analytics. It is focused on making predictions about future outcomes based on a massive amount of historical data as well as techniques like machine learning. With this type of technology, enterprises will be able to forecast trends and behaviors.
The current state of predictive analytics is hardly perfect. A huge obstacle to overcome is getting quality data from different sources and correlating them. Digital agencies and IT firms have their own silos of data and use different tools in obtaining them. There is also the issue of whether there is enough of the right data. When there is not enough for the system to make conclusions from, the results of predictions may be biased and untrustworthy. Blockchain technology might be able to fill the gap in this space.
Blockchainās computational power is gained from multiple connected computers, hence it is powerful enough to properly define the model to be analyzed based on a vast number of data sets. It would use its power to analyze the different stored datasets across computers and pull up the ones that can provide the answer. Furthermore, blockchain may be the cloud equivalent to one physical supercomputer, which makes it accessible to small businesses. Currently, companies that want to utilize predictive analytics have to rely on expensive super machines. With blockchain implemented, the costs to obtain such analytics tools will be greatly reduced.
As for potential applications, blockchain analytics could be used in marketing strategies. Marketers could be able to prepare for future marketing campaigns with the help of data gained from market realities. The system might be able to forecast price movements for financial markets, including cryptocurrencies.
The fusion of data and blockchain technology is poised to grow even more in the next couple of years. This could provide an opportunity for blockchain to display its potential as developers continue to experiment.
Blockchain technology is often considered the best solution to problems caused by centralization. Through blockchain, people get to exercise authority over their personal affairs and enjoy more security and sovereignty, especially with financial transactions. Yet despite all the advantages of blockchain adoption, the technology also has a few current drawbacks.
Many people complain about unstable and sometimes relatively high transaction fees. For some people, the main problem with blockchain is a lack of interoperability between several different systems while others worry about response time or latency. However, a bigger issue lurks around the corner ā scalability.
Compared to traditional systems, blockchain technology might be a long way from tackling the scalability problem. Saito Network helps to solve these issues by providing unique solutions for the general growth of the sector.
What is Saito ($SAITO)?
Saito ($SAITO) is a layer-1 blockchain that provides a permissionless and scalable network for decentralized applications. The open network also supports in-browser crypto applications without private APIs or plugins.
Saito aims to tackle problems caused by centralization, as well as scalability issues that are commonplace with both Proof-of-Work (PoW) and Proof-of-Stake (PoW) blockchains. Instead of paying stakers and miners for block production, the network directly pays internet service providers, allowing easy use of regular browsers for decentralized projects. This method helps new and existing Web3 projects run cost-effective operations instead of paying node operators like Infura.
Learn more about Proof of Stake (PoS) vs Proof of Work (PoW) with our article: Proof of Stake Explained
Saitoās open infrastructure provides better security for projects looking to host on a blockchain without intermediaries. A problem with employing the services of a middleman is the apparent centralization of a supposedly decentralized product. Another issue is that projects connected to the blockchain through node operators are open to several risks if the operator becomes compromised or otherwise unavailable. For example, in 2020, Infura suffered an outage that caused Binance and other exchanges to disable ERC-20 transactions. By connecting projects directly to the blockchain through the browser, Saito Network allows decentralized apps or other infrastructure to host their own nodes without an intermediary.
Features of Saito
Saitoās decentralized framework is essential to the ongoing shift to Web3. Since a major tenet of Web3 is decentralization, the platformās basic structure is the critical tool developers and various projects need to compete in the new iteration of the internet. The following Saito features place the network at the forefront of Web3 development:
Truly Peer-To-Peer: Saito ensures that projects and all their transactions are truly peer-to-peer. No go-between is required.
Scalable Onchain Data: Saito solves scalability problems by providing easy dApp support through browsers instead of relying on a node operator.
Browser Applications: All projects will quickly onboard and operate decentralized applications directly through a browser, without the need for a plugin like MetaMask.
What makes Saito special?
In addition to the advantages Web3 projects enjoy through Saito, the platform also offers the following:
Dynamic App Support: Saitoās network provides a valuable framework for several applications regardless of data or bandwidth requirements. Developers can build anything from games to social media apps and communication tools.
Open Infrastructure: Other networks can take advantage of Saitoās infrastructure to tackle interoperability problems.
Web3 Blockchains: All applications built on Saito support Polkadot and many other major Web3 blockchains, with many more coming down the line.
App Deployment: Developers can easily create and publish apps on Saitoās platform. App creators can do everything from start to finish without any third-party infrastructure.
Vibrant Community: Joining the Saito community exposes projects and developers to an active and growing community of like-minded people excited about Web3 development.
Saito has already processed more than 10 million transactions and averages over 30,000 transactions per day. With more than 30 popular applications and modules already in the works, Saito has positioned itself as the best chance for the ongoing evolution of Web3.
SAITO Token: What is it?
SAITO token is the networkās native asset, a utility token that powers activities on the platform. The platform offers two types of SAITO on different networks, an ERC-20 variation and the Layer One SAITO. The ERC-20 tokens are wrapped tokens in ERC-20 form and are available to public sale participants over vesting periods. Wrapped SAITO asupports purchases and permissionless integration in off-chain applications. Users who hold ERC-20 SAITO also enjoy token withdrawals to any public Saito fork.
Layer-One SAITO tokens have on-chain utility and represent 75% of all tokens minted. As the network expands, on-chain SAITO holders will enjoy increased liquidity and convertibility. However, holders cannot directly convert Layer-One SAITO to ERC-20 SAITO. Of the allocated 75%, the Saito Foundation retains 20%, while strategic partners share a 10% pool. Rewards, contributors/developers, and the Saito core team all receive 15% each of the SAITO token supply.
Generally speaking, creating strong passwords and protecting those passwords from being found out is a userās key tenant in their own protection online when using certain services. But creating complex enough passwords that are difficult to guess or hack with a dictionary attack often leaves a bunch of passwords for each service thatās difficult to even remember.
You could write it down, but that could be found out. And while browsers like Google Chrome do come with their own password managers, that does leave all your passwords behind one single password that is probably just as vulnerable as any others.
Password security is particularly important for crypto enthusiasts and traders, who deal with hackers and infiltrations on a far more regular basis than regular internet users, because thereās literally money to be gained by these bad forces and stolen funds are extremely difficult to recover. There are a lot more hackers out there, and a lot of times where cryptocurrency and other digital assets get stolen.
So with that in mind, a slew of password managing services have become available in the market over the years to aid users with this specific security issue. Let us look at some of the most popular ones in the market right now. (https://duckysonline.com/)
1- Yubikey
Check out our video: YubiKey Review and Guide for a full look at how to use the YubiKey and all its features. You can also check out our article Yubicoās YubiKey: Review and Guide for a step by step written guide on how to use it. Also, check out our YubiKey Review and Guide for a full look at how to use the YubiKey and all its features:
YubiKey Review and Guide
Pros:
Fundamentally, the YubiKey has the same advantages of having a literal physical key for a physical vault. Itās a physical object, so in order to login and configure the account of an online service, the actual YubiKey must be used to deliver the necessary passwords it provides.
This already makes the usage of hardware authenticators like YubiKey very hard to hack, which is why Google and Facebook use them to secure employee and user accounts.
Yubikey, like all hardware authenticators, essentially allow two factor authentication (2FA) to be used safer and more conveniently, because it can produce one time passwords (OTP) you donāt have to create yourself or remember and enter them for you. So not only is it safer, but itās also very convenient – two advantages that donāt usually coincide.
Physical hardware authentication devices are particularly good at avoiding the kind of hacks seen in Coinbase and USD1mil crypto heist last year, where SMS-based 2FA codes were hacked using SIM swapping.
Itās easy to set up as well as use and provides a strong layer of security for the services it protects. Just plug it in, follow the prompts on the service that youāre using (assuming it is supported), press the key and itās set.
For crypto exchanges such as Binance, password keys like the YubiKey can be set to lock withdrawals, logins and password resets individually. What this means is that even if someone were to hack into the account, the individual actions a hacker could do inside is also locked away and needs the YubiKey to access them.
Cons:
Its greatest strength is also perhaps its biggest weakness. Physical objects used for security can still be damaged, left behind in a rush by accident or even lost. And losing a YubiKey can involve some incredibly tedious solutions, so be forewarned. On top of that, some might find the need to carry one around a minor inconvenience, particularly if they do exchanges in different locations.
Another issue that needs to be addressed is that some crypto exchanges might not support YubiKey, particularly for mobile users. So itās important to check for support before purchasing one. For mobile power users, this makes the YubiKey models with USB-C and Lightning connectors somewhat useless, even if USB-C models are still useful on certain laptops like MacBooks.
One minor issue was discovered by the people at Zapier who kept triggering their YubiKeyās when accidentally touching them, resulting in a secured code being entered into whatever textbox you have open at the time. Itās happened so often on Slack, that Zapier has decided to run with the joke and made a custom Slack emoji. Most hackers wonāt know what to do with this sudden burst of password code getting posted on a chat, but itās not a habit many would encourage, and they do provide a means to make the press less sensitive.
And like many password managing solutions, this wonāt stop hackers from getting into your account if the exchange itself is not secure.
Using the Trezor physical wallet as a password manager is somewhat similar to using the YubiKey, but takes the process of securing passwords one level higher. Physical wallets like Trezor and Ledger are cold wallets because they confirm transactions within themselves before they are made, and while you compromise convenience and speed using them, they are by their very nature far more secure.
And by virtue of how it works, Trezor can essentially save an unlimited amount of passwords too.
One noted advantage The Trezor might have over the YubiKey is that so long as you know your seed key, losing a Trezor and getting a replacement is far more straightforward. It is a series of words between 12 and 24 words long using the BIP39 format, and using it in one physical wallet that supports it basically replicates that wallet in another device, restoring your passwords and addresses.
Cons:
Itās important to note that while using a Trezor as a password manager, itās main focus is as a physical wallet. Getting one as just a password manager is a bit overkill considering the prices they go for. It must also be pointed out that this is still a physical device that can be lost or damaged, and replacing one is still kind of pricey as well.
On top of that, the seed key is fundamentally the walletās identity and is often targeted by hackers. The same convenience that allows a Trezor to be replaced with a seed key, also means anybody else that has it can replicate yours too and steal your assets, if youāre not careful.
It is therefore incredibly risky to keep online, so it must also be written down or inscribed on a physical medium of some kind. Paper is typically not encouraged, but there are metal alternatives that are far more durable and secure. Again, these can be damaged, lost or stolen if youāre not careful too.
If you have multiple physical wallets (and some traders do, for diversification and security purposes), you can use a single physical wallet to store the multiple subordinate sed keys, but this can also lead to a recursive rabbit hole of problems, where compromising of the āprimeā key jeopardises the other āsubordinateā keys, even if the later is now incredibly secure.
But to be fair, if you do trade large amounts of capital and you are concerned about hackers, then maybe getting a physical wallet like the Trezor is not a bad investment, and if they are valuable, most people know to treat them as such and secure them well. Plus you get to reap the perk of having a physical authentication device that supports far more kinds of cryptocurrency than the YubiKey.
3- LastPass
Pros:
Lauched in 2008, LastPass is well-known among cyber-experts and is among the most feature-rich password protectors available. It has multi factor authentication as well as browsers and is easy to use. The free version is also pretty decent but has its own limitations as weāll get to below.
LastPass also uses 256-bit AES encryption to scramble your passwords, allowing a zero-knowledge policy within the company. It also allows users to use it in an offline mode, which is a rare trait in online password managers.
The product is also very highly rated across the board for its incredibly feature rich paid-version and is generally considered affordable for what it can do, with Forbes, CNET and manyothertechsites.
One the one hand, this could be a little worrying. Even if no passwords seemed to be compromised, the idea that they could have been is a little nerve-racking. But on the other hand, LastPass seems to be on the ball with regards to making sure users are well-informed and that their product is constantly patched and reinforced.
LastPass will also lock you into the country that youāre in, but you can add more countries into your permissions as needed. Or you could get around that issue and use a VPN.
LastPassā free version has seen what might be seen as a huge downgrade as of last year after it was limited to only one device per user. People already on LastPassā free version before found this change worthswapping to another manager altogether. For newer users looking to just secure one device, this isnāt really an issue but most password manager users would rather their manager work across several platforms.
4- KeePass
Pros:
At first glance, this doesnāt look like a very impressive password manager. The installation is a bit confusing and the application itself isnāt very stylish or intuitive.
It is however open-source and free (barring the modest demand for donations), and while the former seems frivolous to the end user and the later not all that important to crypto-enthusiasts who are looking to protect fairly large amounts of capital from hackers, they matter for two crucial reasons
Firstly, its open-source nature allows anyone to create a startling myriad of plug-ins and customisations. This almost DIY nature of KeePass allows a savvy-enough user to modify KeePass in almost whatever way they want. On top of that, it could be argued that open-source software allows more experts to scrutinise it and its flaws (assuming a sizable-enough enthusiast community, which KeePass has).
Secondly, that it is free makes it an incredible password management solution for tech-savvy individuals, tech businesses or organisations that are cash-strapped but have the skills to utilise KeePass to its fullest potential. Staying free factor turned out to be quite an important factor, as LastPassā changing its terms on its free users showed.
On top of that, various versions of KeePass (that was originally meant to run on desktops and laptops) have come about to provide for platforms it wasnāt originally designed for, such as for iPhone and Android.
Cons:
KeyPassā incredibly customisable, almost DIY nature also reflects the fact that on its own, it is a very bare password manager and probably alienating to a user who isnāt particularly tech-savvy or wants to do the extensive customization to provide features its other rivals have out of the box.
The necessity for its over 100 plugins to provide the convenience most other solutions have right out the box is going to turn off people who want to simply get the solutions over and done with. Its interface is not intuitive and there is no official tech-support.
On top of that, you must choose which database to store your encrypted passwords, because it does not have cloud-based storage for them built in. It is possible to have KeePass store it on detachable storage, such as a thumbdrive, but again, that must be opted. This does make it more secure, but if the storage device is stolen, you lose access to all your devices.
5- BitWarden
Pros:
Inmanyreviewseitherabout, including or just mentioning Bitwarden, the positives of its free version are often contrasted to LastPassā own ever since the later changed its free versionās service terms to only sync between either personal computers or mobile devices, almost to suggest that Bitwarden has dethroned LastPass among free app users.
And itās hard to deny that it has earned its reputation as one of the best open-source free password managers out there.
Bitwarden provides multi-factor authentication via authenticator apps, and is secured with AES-256 encryption, which is then hashed with SHA-256. You can even host all your passwords on your own server for added security. Bitwarden also allows you to create and share passwords and audit password usage. It also auto-fills passwords and their credentials in one go, though this can malfunction on certain sites. And all synch via an unlimited amount of devices.
Thatās not to say that it’s affordable paid version doesnāt get much better, with support added for YubiKey, U2F, and Duo, 1GB encrypted data vault storage, vault health reports, a time-based OTP authenticator and generator and even priority customer support.
Its creators too have had a sterling reputation for transparency, having gone through a third-party audit by Insight Risk Consulting as well as German cybersecurity team Cure53, while its source code is available for anyone on Github to examine. It has even a bug-bounty on vulnerability coordination platform Hackerone.
Cons:
Like its open-source counterpart KeePass to an extent, Bitwarden does suffer from a lack of an intuitive interface and its true capability requires some expertise to extract via plugins. But generally speaking, it’s an incredibly difficult password manager to fault for most reasonably experienced users.
6- Keeper
Pros:
Its introduction is fairly intuitive and quite helpful, walking you through the setup process step-by-step from a warning about browser-based password managers to password imports, and then an installation of web plugins, a tour of its features and the introduction of multi-factor authentication.
Keeper can be used via a web-app, but the actual desktop app allows for biometric logins and an offline mode. Keeper also has a series of other add-on features that you can pay for (or opt out from), such as encrypted file storage, secure messaging and dark web monitoring. Overall, itās a well-priced, intuitive and easy to use password manager with rather good support for businesses.
In terms of security, Keeper is quite strong, having third party audits, compliance with ISO 27001 information security management system standards, the US Department of Commerce and the European Commissionās Privacy Shield framework and even has an internal bug-bounty programme.
One possible vulnerability is that Keeper doesn’t fully automate password updates. When it detects a password-change page, it offers to update and save a stronger password. Your passwords exist for a certain time on Keeperās company servers – unconducive to the zero-knowledge test.
7- 1Password
Pros:
Itās one of the best password managers available on the market right now, priced similarly to LastPass for its standard version, which allows unlimited passwords across unlimited devices, and is offered in a variety of packages suited for their intended demographics too. This allows
It has the sort of features you expect from a good password manager of this range, such as 256-AES encryption, a zero-knowledge policy, two factor authentication, password strengthening and good browser extensions.On top of that, it has straight-forward security recommendations and an easy to use interface.
One is being able to make multiple password vaults that you can organise for different purposes. On family and business plans, you can set up sharing settings with other users that are unique to each vault. On business plans specifically, administrators can remotely configure these settings for team members.
When in travel mode, it hides all password vaults and only shows the ones deemed safe for travel, and gives no indication that the mode is on, which is good if someone wants to keep sensitive information secret, particularly if a device is stolen. Such vault information might include form fills, passwords, secure documents and credit card information.
It will also tell you if your passwords are weak, or if youāve been reusing them for different services, and has a simple-to-use feature that wipes clipboards to remove sensitive data after a timer is set.
1Passworld can also create an Emergency Kit – a PDF with your account email, Secret Key, and a place for you to write down your master password. It offers peace of mind in case you lose some valuable bit of data and can’t gain access to your passwords.
Cons:
There are some minor concerns, though. 1Passwordās browser extensions canāt be used to add passwords or edit them, and while it will tell you if your passwords are weak, it wonāt insist they get stronger with special characters, which is odd.
Alium Finance is a multichain decentralized finance (DeFi) ecosystem with an ambitious roadmap of CrossChain DeFi and non-fungible token (NFT) products. Their aim is to offer its users a single interface multichain ecosystem so they can enjoy different DeFi and NFT products on different blockchains without having to hop from one platform to another.
Alium Swap AMM DEX
Existing AMM DEXs (Automated Market Maker Decentralized Exchanges) have several limitations and disadvantages that prevent them from providing maximum profit and benefits for their users. Decentralized exchanges on different blockchains do not interact with each other and the transfer of assets between them creates serious difficulties for users.
To enable users to extract the maximum profit and choose the blockchain that best suits their needs, Alium Finance has created an advanced multi-blockchain AMM MultiChain DEX called Alium Swap.
It will allow users to safely trade assets and quickly transfer them between different blockchains. Implementing the best features from existing protocols, Alium Swap creates a complete ecosystem of DeFi products that meets a broad variety of customer demands.
Token swap on Alium Swap is a very simple way to trade one token for another via automated liquidity pools. Currently, they have integrated Ethereum, Polygon, Binance Smart Chain (BSC), and Huobi ECO Chain networks. They have also launched a BSC-Polygon Bridge with plans for more bridges between chains to be released soon.
The liquidity provided to the exchange comes from Liquidity Providers (LPs) who stake their tokens in liquidity pools. When users make a token swap (trade) on the exchange they will pay a 0.25% trading fee, which is broken down as follows:
0.20% – Returned to liquidity pools in the form of a fee reward for liquidity providers.
0.05% – Sent to the Alium Swap Treasury.
For a smoother and mobile experience, Alium Swap also offers a mobile app available to users on Android and Apple devices.
$ALM Token
$ALM token is a utility token for the whole Alium ecosystem – it will be used on the DEX, NFT (non-fungible token) marketplace, in their NFT game, as well as for governance and staking.
DEX ā Providing liquidity, profit sharing between $ALM holders, airdrops
NFT Marketplace ā $ALM minting bonus and NFT auctions
Smart Farming ā LP token $ALM farming and next gen $ALM farming
DAO ā Voting with $ALM and proposals with $ALM
Staking ā Dynamic $ALM staking pools
$ALM is a BEP-20 token which means that any wallet supporting Binance Smart Chain can be used for storing $ALM. In the future, ETH-wrapped ALM will also be available.
Liquidity Migration
The Alium development team has introduced the ‘vampiring’ function now available on the platform. You can access it here: https://alium.finance/migrate
Liquidity migration, or ‘vampiring’, is a process that allows users to transfer their liquidity from one exchange to another within the same chain, utilizing the most profitable rates on offer across various protocols and exchanges.
The introduction of the given function on the Alium exchange is needed to allow users to easily transfer their liquidity from other DEXs to Alium Finance for farming $ALM tokens with a greater degree of convenience and profitability. The BSC, Ethereum, and Polygon blockchains, as well as the exchanges they support, are available via the ‘vampiring’ function.
Smart Farming & Strong Holders Pool
Strong Holders Pool is a mechanic developed to incentivize holding $ALM, not selling. To prevent the Farm & Dump phenomenon, which many projects and communities suffer from after the Farming Campaigns, Alium decided to introduce the Smart Farming Pools to reward the Strong Holders at the expense of Flippers.
Strong Holders Pools are available to both Farmers and $ALM holders who didnāt participate in Farming. After you harvest the Farmed ALMs, 90% of $ALM go straight into Strong Holdersā Pools of 100 participants each. When the pool is formed, the game begins. The first users withdraw some of their tokens, which will be rewarded to Diamond Hands, who withdraw last.
The first 60 users who leave the pool will be at a loss while the last 40 users of the pool will be in profit. The amount of tokens lost/gained depends on the proportion between pool participants’ holdings.
Apart from that, the last 8 users of every pool will be rewarded usable NFTs for Aliumās play-to-earn (P2E) game Cyber City Inc.
Cyber City Inc NFT Game
Cyber City is Aliumās first P2E NFT game with collectible drops set in a futuristic cyberpunk world. The play-to-earn (P2E) model is an explosive trend in the blockchain and gaming industry where players of NFT games get to collect lucrative rewards for playing.
In the not-so-distant future, Cyber City dominates the planet, and corporations run the world.
These Corporations control all the wealth and resources, leaving the inhabitants of the City in a dire existence. Cyber City Streets are ugly, cruel and dangerous. A perfect environment for the strongest and most cunning to claw their way to the top. The game features Tokenized Assets and NFT Characters set in the futuristic metaverse called Endless Megapolis.
The Cyber City Genesis Wave NFTs is currently available for purchase through partners such as NFTb, Hyperjump, and Niftify among others. The Genesis Wave will have 6,000 NFT boxes that will contain 10,000 characters, 10,000 city blocks, and 450,000 in-game resources. The game is set to release its beta version in July 2022. (morganstern.com)
Alium.Art NFT Marketplace
One of the main goals of the project is to attract attention to new and promising technologies with a special focus on NFTs. The project development team believes in the integration and use of advanced solutions based on NFTs and has announced the launch of an NFT marketplace called Alium.Art with the implementation of a cross-play NFT asset protocol for blockchain-based games.
Allium.Art is being developed using a design philosophy that is artist-centered with a high degree of customization. Some key features in development:
Multi-Blockchain
Private Collections
Collections Customization
Easy Onboarding
Customizable Galleries
Charity Auctions
VR/AR Galleries
Categories Search
Easy Onboarding
The platform aims to empower artists to sell their art on their terms, represent it in a digital environment using AR and VR technologies, and benefit from selling their art in the form of NFTs. For buyers, it will be a way to acquire unique digital artwork and enter the modern crypto art market. Easy onboarding will ensure anyone can become part of the thriving community, no matter artist, collector, or crypto enthusiast.
Tokenomics via NFTs
The Alium token economic model strives to make it resilient to fluctuations using a distribution model called Initial NFT Offering (INO). The Alium team is confident that this will provide an opportunity to reduce the volatility of the $ALM token value, despite potential high demand for the token.
NFTs are a new milestone in the development of DeFi and the blockchain in general, so the team paid great attention to the development of this direction. The main feature of their approach is the so-called NFT 2.0, which not only acts as collectible cards or tokens but can also be used in various applications as an object of interaction.
All the Smart Farming Pools are built on this principle and users with NFT cards will have the opportunity to increase their profit in farming through NFT cards.
Roadmap for 2022
Synthetic ALM Token (BSC <> ETH)
Tron Integration
Avalanche Integration
CYBR Token Launch
Cyber City Inc NFT Marketplace
Cyber City Inc Clan NFT Drops
ALM Staking – CYBR Farming
External Liquidity Pools
Staking Platform
Super ALM (Governance Token / DAO / Burn)
Cyber City Inc Light Game Launch
Cyber City Inc full release
For more information, check out their official channels below:
Binance Smart Chain (BSC) was created by the team behind Binance exchange, arguably the world’s most popular cryptocurrency exchange platforms founded in 2017 by Changpeng Zhao (CZ). BSC is a dual-chain architecture that encourages users to utilize one blockchain for building digital assets and decentralized apps in order to trade faster. This architecture will run alongside the existing Binance Chain (BC), a decentralized digital asset exchange, whilst providing a fast and secure system that enables smart contracts. This article will explore some of the exciting features of BSC and give users some insight into their security and reward system. For more detailed information we suggest taking a look at the whitepaper.
You can launch your own Binance smart chain validator for free on ANKR
Binance smart chain
Features of Binance Smart Chain
Ethereum Virtual Machine (EVM) Compatibility
As users may know, Ethereum is one of the most practical and popular Smart Contract platforms. Hence, BSC has enabled compatibility with multiple Ethereum tools and nodes to be used in this dual-chain architecture (e.g ecosystem components and dApps)
Cross-Chain Communication
Communication between BC and BSC will be supported in order for users to move digital assets (i.e BEP2 tokens), as well as any other BEP tokens in the future. This is further optimized for scaling dApps that run best with an efficient user experience.
Integration with Chainlink’s Oracle solution for building DeFi apps
Binance Smart Chain integrates Chainlink’s ($LINK) oracle solution. This means that developers on Binance Smart Chain no longer need to dedicate months of engineering time in order to set up their own oracle infrastructure, they can directly build smart contract applications that can connect to real-world data feeds from Chainlink. In turn, developers can build powerful Decentralised Finance (DeFi) applications which utilise Chainlink oracles to retrieve data from data aggregators or price information directly from Binance DEX or Binance exchange. According to Binance, this will bring more robust security and reliability to price feeds on DeFi apps, which in turn gives users more confidence in financial products which are built on Binance Smart Chain.
Independent Blockchain
BSC does not include a layer 2 solution, making it a standalone system. In the event that BC experiences a technical failure, most of BSCās functions are self-contained, hence they should be able to continue operating despite such occurrences.
Staking-based Consensus and Administration
To promote the environment and increased network performance, BSC utilizes a staking-based consensus, additionally allowing for flexible options that the community can administrate.
Short Block Time
One of the highlights listed on the website includes a block time of approximately five seconds, ensuring efficient trading for users.
Binance Smart Chain vs Binance Chain: Differences?
Binance Smart Chain came about because Binance Chain was introduced as a single purpose high-performance DEX. It is on-chain order matching and intended to be very fast. It is able to handle around 100 thousand orders per second with 1-second confirmation. But for Binance Chain to achieve this level of performance, they had to sacrifice something, and that was the smart contract capabilities. However, it was a highly popular feature with users so Binance Smart Chain was released as a parallel chain which supports Ethereum compatible smart contracts, so it supports solidity and is EVM compatible.
Therefore, a key feature of Binance Smart Chain is that it is compatible with Ethereum-based smart contracts. So, if you have a DeFi contract that runs on Ethereum, you can port it over to Binance Smart Chain and it will run there too. It is meant to be an easy way for users to deploy smart contracts on Binance Chain without any additional learning curve. It will also be fully open-sourced so anyone can deploy contracts on the platform. Finally, in terms of performance, Binance Smart Chain is lower performance than Binance Chain, but it should still be higher than Ethereum 1.0.
The major reward implemented for users are transaction gas fees paid in Binance Token ($BNB) (Binanceās native coin), and individuals can also be rewarded for Cross-Chain communication. BNB is the token used to stake for this dual-chain architecture, and allows the prevention of inflation since it is not an inflationary token. Although this token may not be as popular as Bitcoin or Ethereum, it has many uses so validators can still enjoy its benefits.
Proof of Staked Authority (PoSA)
BSC makes use of a system of 21 validators through PoSA, which allows lower fees and shorter block times. PoSA is a blockchain method that allows fast deliveries and fast transactions, making it a valuable algorithm to increase positive user experience. As mentioned in the white paper, BSC will be utilizing a combination of Deputy Proof of Stake (DPoS) and Proof-of-Authority (PoA). This means it will allow community governance, only a limited amount of validators will produce blocks, and it will follow a system similar to Ethereumās Clique consensus engine whereby validators act through a PoA protocol to produce blocks. Combining these will likely improve the efficiency, security, user transparency and satisfaction of the smart chain.
Security: How does Binance Smart Chain protect users?
Although PoA systems usually ensure the security of users, there are still risks of Byzantine validators that may breach the network through methods such as a āClone Attackā. Binance conducts measures to prevent such attacks by encouraging users to wait for blocks to seal after a certain amount of time in order to guarantee secure finality. BSC additionally implements Slashing logic, which is used to punish Byzantine Validators for instability or double signing. This will decrease the chances of āClone Attacksā and expose malicious validators very quickly.
Instability
Refers to validators who miss their turn to produce blocks, which consequently damages the performance of the BSC network. This can occur when individuals have problems such as configuration or hardware related issues. If a certain number of missed terms are recorded, there are risks of validators being able to vote users out so they receive less or no rewards.
Double Signing
Refers to the malicious signing of more than one block that includes the same height and parent block. BSC already has its ways to prevent this so only a deliberate attack allows this to occur.
Status of Binance Smart Chain
The staking mechanism and mainnet for Binance Smart Chain should be launched end of August or early September 2020. Currently, Binance Smart Chain is in testnet phase.
Conclusion
Overall, this dual-chain architecture is enticing for those who want to experience fast trading while building their decentralized apps on one platform and we are definitely excited and anticipating their mainnet launch. Currently, you can go onto the Binance Chain testnet and test it out, as well as request free testnet tokens. Based on the functions of BSC, we highly recommend experienced traders and programmers to give Binanceās new feature a try. For those who are new to Binance, it is also worthwhile to test and try out the platform in anticipation for the full launch.
Decentralised Finance (DeFi) series: tutorials, guides and more
With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces
More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!
Uniswap is an automated liquidity protocol and is one of the most popular decentralised exchanges (DEX) out there because of the surge in popularity of decentralised finance (DeFi). Users can become liquidity providers for a pool on Uniswap by depositing an equivalent value of each underlying token in return for other tokens in the pool. In this article, we look at why Uniswap is so popular and provide a tutorial suitable for both beginners, and some advanced tips and hacks for more advanced users.
You can also check out our Uniswap Guide with a walkthrough of their various features, tips and tricks here:
Key features of Uniswap
Uniswap has 2 major elements or features known as Swap and Pool:
Swap: Uniswap’s Swap feature allows users to swap between Ethereum (ETH) and different ERC-20 tokens.
Pool: Uniswap’s Pool Allows users to earn through providing liquidity. This is done by depositing tokens into a smart contract and you would receive pool tokens in return.
Why is Uniswap so popular? Advantages of the Exchange
Self-custodial: Uniswap allows you to retain full custody of your funds. So there is no risk associated with centralised exchanges where you could stand to lose your funds if the exchange is hacked or goes bankrupt.
No Know Your Customer (KYC) process: Because Uniswap allows you to retain custody of your funds they do not require you to go through a lengthy KYC process and disclose your full name, passport details etc. It also means getting started on the Exchange will be much quicker and will drastically reduce the chances of your personal information falling into the wrong hands if the Exchange is hacked.
Low trading fees: Uniswap only charges a flat fee of 0.30% per trade. This is much cheaper than most decentralised exchanges.
Access to new coins: Usually with centralised exchanges, different cryptocurrency or DeFi projects will need to go through a vetting process with the exchange before their coin or token is listed for trading. However, since Uniswap is decentralised and owing to their popularity, a lot of projects are instead choosing to launch on Uniswap directly. So with Uniswap, users can get their hands on these new tokens first. And with crazy fluctuations in token prices, especially when they first launch, many traders consider it crucial to be the first ones there.
Is Uniswap safe or a scam? Disadvantages and risks
Transaction failure: When swapping coins on Uniswap, transactions can be at risk of failing. This is mostly for 3 reasons. Firstly, you paid too little gas fees and the transaction took longer than the hard deadline coded into the transaction. Secondly, you had specified a maximum price that you would be prepared to pay per token but the price exceeds the maximum before the transaction is completed. Lastly, there is insufficient liquidity in the pool. In these cases, your transactions are “reverted” i.e. reset as if the transaction never occurred, so you would not lose your funds. So it cannot really be said that Uniswap is a scam.
Fake coins: Anyone can list their tokens on Uniswap, so there are people out there who list fake coins on Uniswap in the hopes of being able to scam people into sending their funds for these coins. So Uniswap users need to be extra careful in this respect- see our section below on identifying and avoiding fake coins on Uniswap which teaches you how to double-check you are sending funds to the correct transaction.
Uniswap beginners guide
Uniswap allows users to connect directly to their Exchange, the following wallets are supported: MetaMask, WalletConnect, Coinbase Wallet, Fortmatic and Portis.
Connecting MetaMask to Uniswap
If you don’t have a MetaMask wallet yet, learn to set one up with our MetaMask tutorial.
On Uniswap, click “Launch App” and then “Connect to a wallet”. Choose the MetaMask wallet (or whichever other wallets you want to connect with) and click “Connect wallet”. A popup window would appear showing your account, choose the wallet then click “Next” and “Connect”. Then you are all set!
How to use Uniswap’s Swap feature
Uniswap allows you to swap between ERC-20 tokens. On the Swap tab, choose the amount of ERC-20 tokens you want to swap. Choose the token you want to swap to by clicking the down arrow under “To”. A list will appear and you can choose the token you want to swap to, or if your token is not on the list you can paste the address of the token. Uniswap will display an estimate of how many tokens you would receive after the swap. To confirm, click “Swap”.
Choose the token to be swapped
You will then be taken to a page to confirm your swap (see left image below). There are several figures you need to look out for here:
the amount you are swapping from, and the amount you will receive;
minimum sent: which is the guaranteed minimum amount you would receive if the price drops whilst the transaction is processing;
price impact: the difference between the market price and the price estimate provided by Uniswap due to trade size; and
liquidity provider fee: amount of fees you will be paying to Uniswap. This is generally 0.03% of the transaction.
Once you’ve confirmed your swap, a pop-up window would appear (see right image below) to confirm the gas prices to be paid for this swap since it is an Ethereum transaction. Input the gas prices you wish to pay and click “confirm”.
Confirm swap
Once the transaction is completed, Uniswap will let you know and provide you with a link to Etherscan to show your transaction details. Here you can check how many tokens you actually got out of the swap, and the amount of transaction fees that were paid.
Uniswap advanced tips and tricks
Failed transactions: why does it happen and how to avoid them?
Transactions on Uniswap can fail if the prices of the input currency drops such that it does not fulfil your preset criteria. When a transaction fails, all your sent Ethereum would be reverted back to you. So you do not lose your original funds. However the Ethereum gas fee does get deducted and it is not refunded.
To avoid failed transactions, you can look out for other people who are also trying to do the same transaction as you. To do this click “…” on Uniswap go to “Analytics” and search for your intended trading pair to see how many other people are also trying to do the same swap. If the price of the token you want to swap for is increasing in value, you may want to increase the amount of gas fees. This will speed up your transaction and beat your other competitors to lock in the swap price.
How to get faster / speed up Uniswap transactions
Get faster or speed up your transactions by essentially outbidding other competitors who are trying to process the same transaction. This is by paying more gas fees than others. To see how much gas fees to pay go to Ethereum Gas Station and see the recommended gas prices for fast, standard and safe transactions. As a tip for getting fast transactions, we suggest paying around 10% more than the recommended price for fast transactions. You can input the amount of gas prices you wish to pay in the MetaMask pop-up window before you confirm your transaction (see above section on how to use Uniswap’s Swap feature).
ETH gas station
Fake coins on Uniswap: How to identify and avoid them
Because any coin can be added to Uniswap, there are lots of scam or fake coins on the Exchange. Cryptocurrency transactions are irreversible, so if you accidentally send your funds to buy these scam coins or tokens you will not be refunded. The logo and ticker of these fake coins can look exactly like the real ones, so you need to be careful.
You can verify if the coin or token is real by checking it on Coingecko. To do this, look up the coin or token you want to exchange to on Coingecko, at the bottom of the page find and click on the trading pair for Uniswap (see image on left). You will then automatically be taken back to Uniswap and the token will have been imported (see image on right).
Import token on Uniswap
Another way to verify that the token is genuine is to check it on Etherscan (see below). Again on Coingecko, find the token and click on the etherscan.io explorer. On the Etherscan window, you will be able to see the contract number for the token. Match this contract number with the number in the address bar in your web browser for Uniswap.
Check the token number on Etherscan against the number in your Uniswap browser.
Warning: Do NOT search for the token or its address on Etherscan. Always link to Etherscan via Coingecko or the project’s official website. This is because Etherscan itself lets you search for all tokens and transactions on the blockchain, including the fake ones.
How to adjust slippage tolerance
Slippage in trading occurs when the price at which the order is eventually executed does not match the price at the time you confirmed the transaction. When trading on Uniswap, this is referred to as “slippage tolerance” and is expressed as a percentage.
For coins or tokens whose price is on the way up, there may be a lot of competition to process the transaction and get those tokens. In that case, you can increase the chances of your transaction being processed faster by increasing your slippage tolerance. This will also avoid failed transactions.
To adjust your slippage tolerance, click on the gear icon located at the top right-hand corner on the Uniswap browser. There you can adjust your slippage tolerance. This will, in turn, decrease the minimum amount that is guaranteed to be sent to you. That is, it will increase the chances of your transaction going through but at the cost of potentially receiving fewer cryptocurrencies.
Slippage tolerance compared
Mobile trading: How to use Uniswap on your phone
Prices of cryptocurrencies are always fluctuating, so serious traders want to be able to trade their cryptocurrencies on the go. Uniswap allows you to connect your mobile wallet. Simply go onto Uniswap on your browser and follow the same steps as you would on your PC. This allows the same wallet to appear on your PC and your mobile phone. The following mobile wallets are supported: MetaMask, Trustwallet, Coinbase wallet, Rainbow, Argent, imToken, Pillar, Safe, Math, and Fortmatic.
From our user experience, it’s not the most convenient feature since you need to multitask between several windows. BUT it does fulfil the objective of being able to trade cryptocurrencies on the go.
Uniswap Liquidity Pool guide
Uniswap has liquidity pool which is essentially pools of various tokens that sit in smart contracts. Users can exchange the tokens in the pools using Ethereum as a conduit. And a main feature of Uniswap is that anyone can create new exchange pairs in a liquidity pool for any token, unlike centralised exchanges where the exchange dictates what trading pairs are available.
First off, note that for liquidity pools you need to deposit both an equal value of Ethereum and the token that you want to participate with. So say I want to participate in the ETH/USDT pool, I would need to deposit an equivalent amount of ETH and USDT into the pool at the same time. The funds you supply to these pools will be traded by other people and so there will be fluctuations in the ratios of ETH and USDT that you have.
This is because if someone wants to sell ETH for USDT, they will tap into your liquidity pool and the USDT that you supplied to the pool would be used to buy up the ETH- this whole concept is known as Automated Market Making (AMM). As a result of this, there would be a higher ratio of USDT compared to ETH in your pool. Conversely, if someone wants to sell their USDT for ETH, they would take ETH out and shrink your ETH liquidity. Thus the liquidity pool is like scale, whereby if your ETH goes down by 10 dollars, then your USDT should correspondingly up to by 10 dollars.
So why would liquidity providers do this? It is because they receive a Liquidity Provider Fee from those who are conducting swaps in their liquidity pool. As mentioned earlier in this article, Uniswap charges a flat fee of 0.3% for each transaction. This 0.3% is actually then split in proportion amongst all the liquidity providers of that pool based on their contributions.
Adding liquidity to pools allows you to earn provider fees when other people do swaps
And Uniswap is not the only liquidity pool provider out there, so many people try to find and contribute to the most profitable pools in order to earn more liquidity provider fees. Pools.fyi is one such website that a lot of people use to try and find the best liquidity pools.
What’s the difference between Uniswap version 1 and 2?
Uniswap has launched an improved version of their Exchange, simply referred to as version 2. The main difference between these versions is that version 2 offers ERC-20 to ERC-20 token pools, native price oracles and flash swaps.
Decentralised Finance (DeFi) series: tutorials, guides and more
With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces
More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
